Posts Tagged ‘Rachel Elnaugh’

The source of entrepreneurial determination

August 12, 2009

My MBA in Entrepreneurship didn’t refer much to  the importance of determination. Yet I believe that being determined is a key quality for entrepreneurs. Since I’ve been immersed in the real world of startups I found this idea to be very true.

Rachel Elnaugh calls it the “pit” which you have climb out and Seth Godin named it the “dip” that you must see beyond. Paul Graham says its “The most important quality in a startup founder. Not intelligence– determination.” (point 5). But what does it mean to be determined?

terminator_fireThe Terminator movie

The Terminator machine has absolute determination to achieve its single objective. Entrepreneurs derive their determination from:

  1. Focus – There is alot of talk in business schools about vision and strategy.  A vision brings something to aim for. Laurence Peter said “If you don’t know where you are going, you will probably end up somewhere else.” With so much to do in a startup it can be overwhelming. Time can easily to burnt on doing things that don’t really matter.  Determination brings the focus needed to work on the things that do matter.
  2. Belief – Because startups have limited resources they have to believe in their vision.  The founders have to be determined  to energise  enough new resources to reach their goal. Mahatma Gandhi,  “If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.” If  founders don’t believe in what they are doing no one else will and others aren’t going to help.
  3. Committed - There’s is no getting away from it. Startups are hard work . The entrepreneur has to  fully commit and be determined to make the startup work. Peter Drucker said “Unless commitment is made, there are only promises and hopes; but no plans.”  The entrepreneur has to sacrifice other parts of their life’s to make it work.
  4. Consistency – Most business is based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The trouble is trust takes time to build up.  If the entrepreneur chops and changes too much this trust will not buildup. Patience and persistence on a single course is necessary. Build momentum through each successive achievement towards the startups overarching goal.
  5. Think skinned – Entrepreneurs are well known for their determination and tenacity. They have to be thick skinned to survive the startup emotional roller coaster. Everyone will give advice and “hundreds of people will tell you your idea is rubbish” says Richard Reed the co-founder of Innocent Drinks. They may even think the entrepreneur is insane. The entrepreneur has to be determined to press ahead if they believe in an idea.
  6. Flexible -  There is no point in flogging a dead startup idea! Once a new venture is started it can be difficult to see the difference between a set back or an idea that will never fly. Seth Godin believes that successful entrepreneurs know the difference between a dead-end and  natural dips. A startup vision and plan needs to be broad enough to accept change.
  7. Lucky – Entrepreneurs need to be lucky people. However, as  Ernest Hemingway said, “You make your own luck”. If the entrepreneur is  determined and locates themselves often enough in the right place where things can happen, they eventually will.

James Dyson is a classic case of determination. In 1983 his new idea was rejected by all the major house hold vacuum cleaner manufactures. He had the focus,  belief and commitment to manufacturer the new idea himself in 1993. During 2005 Dyson took a massive a 20.7% US marketshare compared to Hoover’s 15.6%.

Determination keeps us going when we loose all hope. Its when everyone and everything seems to be going against us. Determination is the spirit of innovation, entrepreneurship and being human. As Thomas A. Edison said “I have not failed. I’ve just found 10,000 ways that won’t work.”

Inside Dragons’ Den & Rachel Elnaugh startup lessons

March 24, 2009

Rachel Elnaugh of Red Letter Days and Dragon’s Den fame spoke last week of her Den and startup experiences. Rachel now mentors startup founders. Rachel said ‘99% of all Dragon’s Den footage ended up on the cutting room floor’ and only the “bitchy” comments make it to the final cut. Dragon’s Den is great entertainment but it does have its darker side.

dragon-shrek

Rachel confirmed my long held view that Dragons’ Den is not how real business funding is done. The show producers deliberately put many unsuitable candidates in front of the investors to provoke and maximize emotional responses on both sides. This makes for exciting entertainment but is frequently at the expense of the entrepreneur. The entrepreneur’s often become the laughing stock. Some of the entrepreneurs are naive. Some are foolish. Many of them are unprepared but they’ve all taken a significant risk to start their own business. We now live in a time when our economy needs young fresh businesses the most. So lets celebrate entrepreneurship and give them a helping hand.

In the past I’ve heard negative comments questioning Rachel’s success. I even heard some of these after Rachel’s talk. From my experience of interviewing and working for entrepreneurs there is often more to learn from failure than success. Yes, Rachel did fail after having a big success, however she has not quit. More importantly she has continued to learn from her experiences. This has enabled her to change her focus. I think there is much to learn from Rachel’s 16 points on starting and running a startup:

  1. You need the ability to overcome constant knock backs – It can be an emotional roller coaster of a ride. You have to pick yourself up and keep running. Good things can come from bad situations. My startup was badly let down by a freelancer last week but in the end we found someone even better.
  2. Think BIG – Jim Connolly posted ‘6 words to transform your results!’ - “Start with the end in mind.”. This is not a new idea – Laurence J. Peter said: “If you don’t know where you are going, you will probably end up somewhere else.”
  3. Have a killer idea – Hummm.. difficult one. Innovation is not easy. A great way to look at the Innovation challenge: Tyler Durden’s 8 rules of Innovation. We’ve taken a long route to come up with our product idea and that’s only the start.
  4. Your first/fast decision if often the best one – I agree but also some thought and analysis is always useful.
  5. You will go through a ‘Dark period’ (the ‘pit‘) - When the knock backs get too hard or they come too often you may loose all hope. Keep the faith and keep believing as this entrepreneur did.
  6. Yours sales will be half your forecast and costs will be double – I’ve heard variation on this from 2.5 to 4 times cost multipliers. Oh dear!
  7. Pay for marketing help – Good idea if you can afford it or you don’t have the skills.
  8. A good sales model should be effortless – Sounds like a dream. ‘Pinch me quick!
  9. PR & Word of mouth marketing is vital – Absolutely number one in the new open web world
  10. It’s dangerous when you win business awards. The ego rules. – I’ve also heard this before. Good advice.
  11. Keep the company lean – A lean mean fighting machine :)
  12. Get proper funding if your going to grow your company – Not aways the case. Atlassian is a good home grown example
  13. Believe in yourself – But don’t forget the people around you
  14. Know the numbers – A very important point which the Dragons’ always expect entrepreneurs to have
  15. Have absolute persistence and determination – For me its back to Jim’s point “Start with the end in mind“, then you have something to aim for
  16. Take responsibility (don’t blame others)A true leaders quality

I enjoyed Rachel’s talk. She showed openness, commitment to business ethics and reflective learning. Many of Rachel’s points are obvious but as I’ve said many times over the last three years the ‘obvious is all around us, but it’s hard to follow’. There is a difference between knowing the path and walking the path’.


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